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Endogenous Labor Supply and International Trade

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  • AGO Takanori
  • MORITA Tadashi
  • TABUCHI Takatoshi
  • YAMAMOTO Kazuhiro

Abstract

It is assumed in new trade theory and new economic geography that the supply of labor is fixed, which is not true in real labor markets. We develop a model of new trade theory by incorporating an elastic labor supply and analyze the impacts of technological progress on the equilibrium outcomes of working hours and economic welfare. We first show that the labor supply curve is backward bending. We then show that working hours in developed countries are longer in the first stages of development, but shorter in the second stages of development.

Suggested Citation

  • AGO Takanori & MORITA Tadashi & TABUCHI Takatoshi & YAMAMOTO Kazuhiro, 2014. "Endogenous Labor Supply and International Trade," Discussion papers 14062, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:14062
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    References listed on IDEAS

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    Cited by:

    1. Hajime Takatsuka & Dao‐Zhi Zeng, 2018. "Elastic labor supply, variable markups, and spatial inequalities," Review of International Economics, Wiley Blackwell, vol. 26(5), pages 1084-1100, November.
    2. Xinmeng Li & Dao-Zhi Zeng, 2022. "Frictional unemployment, bargaining, and agglomeration," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(1), pages 151-179, February.
    3. Takanori Ago & Tadashi Morita & Takatoshi Tabuchi & Kazuhiro Yamamoto, 2018. "Elastic labor supply and agglomeration," Journal of Regional Science, Wiley Blackwell, vol. 58(2), pages 350-362, March.
    4. Carroni, Elias & Delogu, Marco & Pulina, Giuseppe, 2023. "Technology adoption and specialized labor," International Economics, Elsevier, vol. 173(C), pages 249-259.

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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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